News from ISSBA
Friday, 09 November 2018 10:27

The five habits of highly effective companies

Our new ISSBA Treasurer, Dan Hines from BDO LLP, explains the five habits of highly effective companies.

Dan HinesThe way in which businesses operate has dramatically changed. The rise of technology and access to information has meant agile-minded entrepreneurs can grow cutting-edge businesses overnight. It took the telephone 75 years to notch up 50 million users. Facebook did it in three and a half years, and the Angry Birds mobile app did it in just 35 days. The use of technology and a better connected society, generally, has meant businesses can become global overnight. 

These opportunities continue to increase, despite ever more complex political and socioeconomic climates. Brexit means the country is moving into unchartered territory. The direction of travel posed by the exit from the European Union has already raised concerns in the business community.

But, despite this uncertainty, there are still countless opportunities available, and many emerging growing businesses are taking advantage of them. To understand what was driving success in these businesses, BDO commissioned research among some of the UK’s most successful companies. 

The results offered an interesting insight into the world of innovators, founders, change drivers and owner/managers alike. One common theme that emerged from our findings was that like highly effective people, highly effective businesses share specific traits and follow common pathways to success. They all:

  • Have a clear road map, but stay flexible
  • Invest in productivity and innovation
  • Learn from peers
  • Focus on sales growth
  • Recruit the right team

We have coined these habits as the “The five habits of highly effective companies”. These are not hard and fast rules. A company does not need to undertake all of them to be successful. However, they are naturally good practices for any business that wants to be highly effective. The more you can make them habits in your business, the more likely you will be to succeed.  

We believe that all businesses, no matter how big or small, should have goals and understand how they can achieve them. The key is setting key performance indicators (KPIs) and measuring performance against these regularly. Of course, every company is different but these KPIs could be as simple as the number of hits on the company website in a month or to achieve a profit of £x in a month. 

Obviously, a business owner needs to have reliable management information available to them regularly – both financial and non-financial, in order to be able to assess how they are performing against these KPIs and to make timely decisions on areas for improvement. Advances in accounting software technology mean that business owners can create KPI dashboards, feed their financial and non-financial information into the software and at the touch of a button measure how they are performing against what they consider the key criteria.

To discuss your business goals, ambitions and your KPIs, to see how BDODrive can help you or simply to hear more about our findings, please contact daniel.hines@bdo.co.uk.

BDO Drive